New vs Old Tax Regime Calculator India 2026-27: Which Saves More?

The new tax regime is the default option for many salaried employees, but it is not automatically best for everyone. The old regime can still save tax if you have enough eligible deductions and exemptions.

For a quick visual comparison, open the Old vs New Tax Regime Web Story.

New tax regime: when it helps

The new regime is simpler because it gives lower slab rates without requiring most deductions. For salaried employees, the standard deduction is applied before calculating taxable income.

It usually works well when:

• You do not pay rent or cannot claim HRA exemption
• You do not have large Section 80C deductions
• You prefer simple tax planning
• Your taxable income is eligible for rebate benefits
• Your employer has not structured many old-regime exemptions

Old tax regime: when it helps

The old regime can be better when you actively claim deductions and exemptions. Common examples include:

• HRA exemption if you pay rent
• Section 80C deductions such as EPF, PPF, ELSS, life insurance, and home loan principal
• NPS deduction
• Health insurance under Section 80D
• Home loan interest deduction

If your deductions are high enough, the old regime can reduce taxable income more than the new regime's lower slabs.

Quick decision guide

Use this as a starting point:

• Lower salary with few deductions: new regime often works well
• Salary around 12 LPA: compare both, especially if you pay rent
• Salary around 15 to 20 LPA: old regime can win with HRA and deductions
• High salary with limited deductions: new regime can be competitive
• Anyone with home loan and rent-related benefits: old regime deserves a careful check

Common mistake

Many employees compare tax regimes using only gross CTC. That can be misleading. You should compare using taxable income after:

• Standard deduction
• HRA exemption, if old regime
• Other eligible deductions, if old regime
• Employer-side CTC components removed from monthly gross
• Employee PF within the eligible old-regime investment deduction limit, not as a second unlimited deduction
• Professional tax paid, deductible from taxable salary under the old regime only

Tax year and deduction limits

Reviewed 27 October 2026. Select Tax Year 2026-27 or historical FY 2025-26 in the calculator. Under the Income-tax Act, 2025, the new regime is section 202 and the resident-individual rebate is section 156. Section 87A, 80C and 80D are familiar earlier-law labels used in older guides and historical returns; do not copy those section numbers into current-year filings without checking the applicable Act.

The standard deduction is up to Rs 75,000 under the new regime and Rs 50,000 under the old regime, limited to salary. The standard deduction reduces taxable salary, not bank credit. Employee PF and professional tax still reduce take-home in either regime, but that does not make them income-tax deductions under the new regime.

See the Income Tax Department's tax-rate guide and Income-tax Act, 2025. The calculator is a resident, salary-only estimate; special-rate income and other employers can change the result.

Tools to compare before selecting a regime

Use the India CTC to In-Hand Salary Calculator to compare new and old regime estimates from the same salary structure.

If you pay rent, also test the HRA Exemption Calculator. HRA is one of the common reasons the old regime can still be worth checking.

Bottom line

There is no single best tax regime for everyone. Use your actual salary structure, rent, city type, age group, PF policy, and deductions before selecting a regime with HR.